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106th CONGRESS
2d Session
H. R. 5584
To amend the Internal Revenue Code of 1986 to designate educational
empowerment zones in certain low-income areas and to give a tax
incentive to attract teachers to work in such areas.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 26, 2000
Mr. Towns introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
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A BILL
To amend the Internal Revenue Code of 1986 to designate educational
empowerment zones in certain low-income areas and to give a tax
incentive to attract teachers to work in such areas.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Educational Empowerment Act''.
SEC. 2. DESIGNATION OF EDUCATIONAL EMPOWERMENT ZONES.
(a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subchapter:
``Subchapter X--Educational Empowerment Zones
``Sec. 1400E. Designation of educational
empowerment zones.
``SEC. 1400E. DESIGNATION OF EDUCATIONAL EMPOWERMENT ZONES.
``(a) Designation.--
``(1) Educational empowerment zone.--For purposes of this
title, the term `educational empowerment zone' means any area--
``(A) which is nominated by one or more local
governments and the State or States in which it is
located for designation as an educational empowerment
zone (hereinafter in this section referred to as a
`nominated area'), and
``(B) which the Secretary of Health and Human
Services and the Secretary of Education (hereinafter in
this section referred to as the `Secretaries
concerned') jointly designate as an educational
empowerment zone.
``(2) Number of designations.--The Secretaries concerned
may designate not more than 30 nominated areas as educational
empowerment zones.
``(3) Areas designated based on degree of poverty, etc.--
Except as otherwise provided in this section, the nominated
areas designated as educational empowerment zones under this
subsection shall be those nominated areas with the highest
average ranking with respect to the criteria described in
subsection (c)(3). For purposes of the preceding sentence, an
area shall be ranked within each such criterion on the basis of
the amount by which the area exceeds such criterion, with the
area which exceeds such criterion by the greatest amount given
the highest ranking.
``(4) Limitation on designations.--
``(A) Publication of regulations.--The Secretaries
concerned shall prescribe by regulation no later than 4
months after the date of the enactment of this
section--
``(i) the procedures for nominating an area
under paragraph (1)(A),
``(ii) the parameters relating to the size
and population characteristics of an
educational empowerment zone, and
``(iii) the manner in which nominated areas
will be evaluated based on the criteria
specified in subsection (c).
``(B) Time limitations.--The Secretaries concerned
may designate nominated areas as educational
empowerment zones only during the 24-month period
beginning on the first day of the first month following
the month in which the regulations described in
subparagraph (A) are prescribed.
``(C) Procedural rules.--The Secretaries concerned
shall not make any designation of a nominated area as
an educational empowerment zone under paragraph (2)
unless--
``(i) a nomination regarding such area is
submitted in such a manner and in such form,
and contains such information, as the
Secretaries concerned shall by regulation
prescribe, and
``(ii) the Secretaries concerned determine
that any information furnished is reasonably
accurate.
``(5) Nomination process for indian reservations.--For
purposes of this subchapter, in the case of a nominated area on
an Indian reservation, the reservation governing body (as
determined by the Secretary of the Interior) shall be treated
as being both the State and local governments with respect to
such area.
``(b) Period for Which Designation Is in Effect.--Any designation
of an area as an educational empowerment zone shall remain in effect
during the period beginning on the date of the designation and ending
on the earliest of--
``(1) December 31, 2005,
``(2) the termination date designated by the State and
local governments in their nomination, or
``(3) the date the Secretaries concerned revoke such
designation.
``(c) Area and Eligibility Requirements.--
``(1) In general.--The Secretary of Commerce may designate
a nominated area as an educational empowerment zone under
subsection (a) only if the area meets the requirements of
paragraphs (2) and (3) of this subsection.
``(2) Area requirements.--For purposes of paragraph (1), a
nominated area meets the requirements of this paragraph if--
``(A) the area is within the jurisdiction of one or
more local governments,
``(B) the boundary of the area is
continuous, and
``(C) the area does not include an
empowerment zone (as defined in section
1393(b)) other than such a zone designated
under section 1391(g).
``(3) Eligibility requirements.--For purposes of paragraph
(1), a nominated area meets the requirements of this paragraph
if the State and the local governments in which it is located
certify that the nominated area satisfies such conditions as
the Secretary of Education deems appropriate.
``(4) Consideration of dropout rate, etc.--The Secretary of
Education, in setting forth the conditions for eligibility
pursuant to paragraph (3), shall take into account the extent
to which an area has low-income families, a high dropout rate,
a high rate of teen pregnancy, and large school class sizes.
``(d) Coordination With Treatment of Enterprise Communities.--For
purposes of this title, if there are in effect with respect to the same
area both--
``(1) a designation as an educational empowerment zone, and
``(2) a designation as an enterprise community,
both of such designations shall be given full effect with respect to
such area.
``(e) Definitions and Special Rules.--For purposes of this
subchapter, rules similar to the rules of paragraphs (2), (3), (5), and
(7) of section 1393 shall apply.''.
(b) Clerical Amendment.--The table of subchapters for chapter 1 is
amended by adding at the end the following new item:
``Subchapter X. Educational Empowerment
Zones.''
SEC. 3. CREDIT FOR DONATIONS TO SCHOOL DISTRICTS IN EDUCATIONAL
EMPOWERMENT ZONES.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 30A the following new section:
``SEC. 30B. CONTRIBUTIONS TO SCHOOL DISTRICTS IN EDUCATIONAL
EMPOWERMENT ZONES.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the amount of qualified educational empowerment zone
contributions made by the taxpayer during such year.
``(b) Maximum Credit.--The amount of the credit allowed by
subsection (a)--
``(1) in the case of an individual, shall not exceed
$2,000, and
``(2) in the case of any other taxpayer, shall not exceed
$10,000.
``(c) Definition of Qualified Educational Empowerment Zone
Contributions.--For purposes of this section, the term `qualified
educational empowerment zone contributions' means cash contributions
made to any school district located in an educational empowerment zone
(as designated under section 1400E) if such contributions--
``(1) but for subsection (d), would be allowable as a
deduction under section 170, and
``(2) are used for any of the following purposes by the
school district:
``(A) Hiring new teachers.
``(B) Increasing teacher salaries.
``(C) Training teachers.
``(d) Denial of Double Benefit.--No deduction shall be allowed
under this chapter for any contribution taken into account in computing
the credit under this section.
``(e) Election.--This section shall apply to any taxpayer for any
taxable year only if such taxpayer elects (at such time and in such
manner as the Secretary may by regulations prescribe) to have this
section apply for such taxable year.
``(f) Application With Other Credits; Carryover of Excess Credit.--
The credit allowed by subsection (a) for any taxable year shall not
exceed the excess (if any) of--
``(1) the regular tax for the taxable year reduced by the
sum of the credits allowable under subpart A and the preceding
sections of this subpart, over
``(2) the tentative minimum tax for the taxable year.
If the credit under subsection (a) exceeds the limitation of the
preceding sentence, such excess shall be added to the credit allowable
under subsection (a) for the succeeding taxable year.''.
(b) Clerical Amendment.--The table of sections for subpart B of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 30A the following new
item:
``Sec. 30B. Contributions to school
districts in educational
empowerment zones.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 4. TEACHER LOAN FORGIVENESS PROGRAM.
Part B of title IV of the Higher Education Act of 1965 is amended
by inserting after section 428K (20 U.S.C. 1078-11) the following new
section:
``SEC. 428L. LOAN FORGIVENESS FOR MATHEMATICS AND SCIENCE TEACHERS.
``(a) Purpose.--It is the purpose of this section to encourage more
individuals to enter and stay in the field of teaching mathematics,
science, and related fields.
``(b) Program.--
``(1) In general.--The Secretary shall carry out a program
of assuming the obligation to repay, pursuant to subsection
(c), a loan made, insured, or guaranteed under this part or
part D (excluding loans made under sections 428B and 428C or
comparable loans made under part D) for any new borrower after
October 1, 1998, who--
``(A) has been employed as a full-time teacher for
3 consecutive complete school years in a school that is
located in an educational empowerment zone, as such
term is defined in section 1400E of the Internal
Revenue Code of 1986;
``(B) is a fully qualified teacher; and
``(C) is not in default on a loan for which the
borrower seeks forgiveness.
``(2) Award basis; priority.--
``(A) Award basis.--Subject to subparagraph (B),
loan repayment under this section shall be on a first-
come, first-served basis and subject to the
availability of appropriations.
``(B) Priority.--The Secretary shall give priority
in providing loan repayment under this section for a
fiscal year to student borrowers who received loan
repayment under this section for the preceding fiscal
year.
``(3) Regulations.--The Secretary is authorized to
prescribe such regulations as may be necessary to carry out the
provisions of this section.
``(c) Loan Repayment.--
``(1) Eligible amount.--The amount the Secretary may repay
on behalf of any individual under this section shall not
exceed--
``(A) 80 percent of the sum of the principal
amounts outstanding of the individual's qualifying
loans at the end of 3 consecutive complete school years
of service described in subsection (b)(1)(A);
``(B) an additional 10 percent of such sum at the
end of each of the next 2 consecutive complete school
years of such service; and
``(C) a total of more than $10,000.
``(2) Construction.--Nothing in this section shall be
construed to authorize the refunding of any repayment of a loan
made under this part or part D.
``(3) Interest.--If a portion of a loan is repaid by the
Secretary under this section for any year, the proportionate
amount of interest on such loan which accrues for such year
shall be repaid by the Secretary.
``(4) Double benefits prohibited.--No borrower may, for the
same service, receive a benefit under both this section and
subtitle D of title I of the National and Community Service Act
of 1990 (42 U.S.C. 12601 et seq.). No borrower may receive a
reduction of loan obligations under both this section and
section 428J or 460.
``(d) Repayment to Eligible Lenders.--The Secretary shall pay to
each eligible lender or holder for each fiscal year an amount equal to
the aggregate amount of loans which are subject to repayment pursuant
to this section for such year.
``(e) Application for Repayment.--
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